Running Facebook Ads as a local business can feel like a balancing act—especially when you're working with a tight budget. The good news? You don’t need thousands of dollars to see results. With the right strategy, even small businesses can compete and grow using Facebook Ads effectively.
At our Facebook Ads Melbourne agency, we’ve helped dozens of local businesses stretch their ad spend while maximizing ROI. In this guide, we’ll break down the best budget strategy for Facebook Ads tailored to small and local businesses.
1. Start Small with Daily Budgets
Instead of diving in with a huge monthly budget, begin with a modest daily budget—as low as $5–$10/day. This approach helps you:
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Test which audiences and creatives work best
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Avoid burning your entire budget on underperforming ads
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Collect valuable data before scaling up
Using Facebook’s learning phase wisely can help you identify early winners before investing more.
???? Tip: For new advertisers in Melbourne, we often recommend starting with $150–$300 for the first month. This gives you enough room to test without overspending.
2. Focus on One Campaign Objective at a Time
The biggest mistake small businesses make? Trying to do too much in one campaign.
Instead, choose one clear objective—like lead generation, traffic, or conversions—and let the Facebook algorithm optimize toward it. For example:
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A restaurant might run a campaign to increase reservations
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A local salon could focus on appointment bookings
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A retail shop may drive traffic to a weekend sale
Our Facebook Ads Melbourne team always advises focusing budget and creative around one goal per campaign, then branching out based on performance.
3. Use Geographic Targeting to Stretch Your Budget
As a local business, you don’t need to target an entire city or state—just the areas that matter.
Use Facebook’s geo-targeting feature to narrow your audience:
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Target by postcode, suburb, or a specific radius (e.g., 5–10km from your store)
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Exclude areas outside your service range
This laser focus prevents wasted impressions and ensures your limited ad spend reaches people most likely to take action.
4. Run A/B Tests to Improve ROI
Instead of running one ad and hoping for the best, use A/B testing to identify what works:
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Test different ad copy, headlines, and creatives
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Try multiple audience segments (age, interests, behaviors)
By optimizing each part of your campaign, you can gradually improve performance—without increasing your budget. As a Facebook Ads Melbourne provider, we’ve seen businesses cut their cost-per-lead in half simply by testing smarter.
5. Retarget Website Visitors and Engaged Users
One of the most cost-effective strategies? Retargeting. These ads go to people who have already:
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Visited your website
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Interacted with your Facebook or Instagram page
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Watched your videos
Retargeting often costs less and converts better because the audience already knows your brand. Use this tactic to drive warm leads back for bookings, purchases, or in-store visits.
6. Track and Adjust Weekly
Don't “set and forget.” Review your results weekly:
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Which ads are performing well?
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Which audiences are converting?
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Are you hitting your cost-per-result goals?
Pause low performers and shift budget to top-performing ad sets. If you're unsure how to read the data, a Facebook Ads Melbourne expert can help you break it down and make data-driven decisions.
Final Thoughts
You don’t need a massive budget to run successful Facebook Ads for your local business. What you do need is a smart, focused strategy—starting small, targeting locally, and optimizing continuously.
Whether you're a café in Fitzroy, a plumber in St Kilda, or a gym in Southbank, our team of Facebook Ads Melbourne specialists can help you build a high-ROI ad strategy that fits your budget and drives real growth.
Want help launching your first campaign?
Get Free Analysis with our Facebook ad experts in Melbourne for a free consultation and budget plan tailored to your local business goals.